Industrials

• On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.
• The fact that this material breach of duty was not revealed prior to the merger announcement adds to the argument that this merger/split/delisting should be either cancelled or redone. 
• We remain negative on all major companies involved in this deal including Doosan Bobcat and Doosan Robotics. The breach of duty at Doosan Bobcat adds to the fire. 

• ENEOS Holdings (5020 JP) has increased the Tatsuta Electric Wire & Cable (5809 JP) tender offer price by 8.3% to JPY780 and extended the offer period to 19 August.
• Eneos tried to get the required acceptances by refusing to bump and subsequently extending the offer period. The tactics failed as minorities required a bump due to the market re-rating. 
• While the revised offer remains light, the token bump and deal fatigue should suffice to nudge the marginal vote to accept. At the last close, the gross/annualised spread was 5.0%/85.8%.

• AST SpaceMobile has recently made headlines with a significant leap in its ambitious mission to build the world’s first space-based cellular broadband network.
• The company has announced the successful completion and upcoming shipment of its first five commercial satellites, marking a pivotal milestone that has already caused its stock to surge by nearly 25%.
• These satellites, known as Bluebirds, are set to provide unprecedented global connectivity directly to standard mobile devices, bridging the digital divide and offering broadband services in previously unreachable areas.

• The United Airlines Holdings second quarter 2024 earnings emphasized its strategic navigation through the industry’s capacity and demand fluctuations, where it maintained a leading position thanks to optimized operational tactics and strategic foresight.
• Revenues increased by 5.7% year-over-year, totaling $15 billion, albeit with Total Revenue per Available Seat Mile (TRASM) decreasing by 2.4% due to a significant 8.3% increase in capacity.
• This disparity between revenue growth and capacity magnification underscores the industry challenge of matching supply with demand efficiently.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Rexel’s ESG as “Strong”, in line with its Social and Governance scores, while the Environmental score is “Adequate”. Controversies are “Immaterial” and Disclosure is “Strong”. 

• Textron Inc., a global aerospace and defense company, reported revenues of $3.5 billion in Q2 2024, an increase from $3.4 billion in the second quarter of last year.
• The company also completed the acquisition of Amazilia Aerospace, a digital flight controls and flight guidance systems firm for manned and unmanned aircraft, which aligns with Textron’s strategic goals and likely to bolster its capabilities.
• The positive performance was driven by the Aviation segment which realized higher revenues of $1.5 billion with a profit of $195 million, up $24 million from the same quarter in the previous year.

• On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.
• The fact that this material breach of duty was not revealed prior to the merger announcement adds to the argument that this merger/split/delisting should be either cancelled or redone. 
• We remain negative on all major companies involved in this deal including Doosan Bobcat and Doosan Robotics. The breach of duty at Doosan Bobcat adds to the fire. 

• ENEOS Holdings (5020 JP) has increased the Tatsuta Electric Wire & Cable (5809 JP) tender offer price by 8.3% to JPY780 and extended the offer period to 19 August.
• Eneos tried to get the required acceptances by refusing to bump and subsequently extending the offer period. The tactics failed as minorities required a bump due to the market re-rating. 
• While the revised offer remains light, the token bump and deal fatigue should suffice to nudge the marginal vote to accept. At the last close, the gross/annualised spread was 5.0%/85.8%.

• AST SpaceMobile has recently made headlines with a significant leap in its ambitious mission to build the world’s first space-based cellular broadband network.
• The company has announced the successful completion and upcoming shipment of its first five commercial satellites, marking a pivotal milestone that has already caused its stock to surge by nearly 25%.
• These satellites, known as Bluebirds, are set to provide unprecedented global connectivity directly to standard mobile devices, bridging the digital divide and offering broadband services in previously unreachable areas.

• The United Airlines Holdings second quarter 2024 earnings emphasized its strategic navigation through the industry’s capacity and demand fluctuations, where it maintained a leading position thanks to optimized operational tactics and strategic foresight.
• Revenues increased by 5.7% year-over-year, totaling $15 billion, albeit with Total Revenue per Available Seat Mile (TRASM) decreasing by 2.4% due to a significant 8.3% increase in capacity.
• This disparity between revenue growth and capacity magnification underscores the industry challenge of matching supply with demand efficiently.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Rexel’s ESG as “Strong”, in line with its Social and Governance scores, while the Environmental score is “Adequate”. Controversies are “Immaterial” and Disclosure is “Strong”. 

• Textron Inc., a global aerospace and defense company, reported revenues of $3.5 billion in Q2 2024, an increase from $3.4 billion in the second quarter of last year.
• The company also completed the acquisition of Amazilia Aerospace, a digital flight controls and flight guidance systems firm for manned and unmanned aircraft, which aligns with Textron’s strategic goals and likely to bolster its capabilities.
• The positive performance was driven by the Aviation segment which realized higher revenues of $1.5 billion with a profit of $195 million, up $24 million from the same quarter in the previous year.

• On the 22 July, waste-to-energy play Canvest Environmental Protection  (1381 HK) announced a pre-conditional Offer from Grandblue Environment (600323 CH) at $4.90/share (best & final), by way of a Scheme.
• Terms mirror that announced on the 7th July. Best Approach (54.75% of shares out) is seeking to roll over 7.23%. Pre-cons include the usual regulators: MoC, NDRC, SAMR and SAFE.
• Any new dividends paid will be netted. 4.478% blocking stake. Pre-IPO investor AEP Green Power, has 5.67%. Best Approach is required to abstain from voting on the Scheme and rollover.

• Dai Nippon Printing is a 150-year-old Japanese industrial conglomerate with a focus on niche growth businesses and a history of cross-shareholding sales and share repurchases
• The company has a dominant position in its highest earning segments and is undervalued at 5-6x forward P/E, potentially offering significant upside in the future
• Originally founded as Shueisha in 1876, DNP has evolved from a printing company to a diversified business with a strong emphasis on research and development.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Nokia OYJ (NOKIA FH) is currently the lowest ranked security in SX5E but still above the exit threshold. Its potential deletion can cause the addition of DSM-Firmenich (DSFIR NA). 
• Deutsche Post (DHL GR) & Reckitt Benckiser (RKT LN) are below the SX5P exit threshold. Their deletion can cause the addition of Intesa Sanpaolo (ISP IM) & Banco Bilbao (BBVA SM) .
• Cap Gemini SA (CAP FP) and Compass (CPG LN) are examples of companies with significant market caps which are excluded due to supersector coverage. 

• Doosan Robotics reported disappointing 2Q 2024 results. It generated sales of 14.4 billion won (up 10.1% YoY) and operating loss of 7.9 billion won in 2Q 2024.
• After the disappointing results in 2Q 2024, it is likely that the consensus will lower their sales and profit estimates of Doosan Robotics for the next three years.
• The consensus is likely to lower sales estimates by at least 15-20%+ in the next two years. In addition, the profit margin estimates are likely to be reduced materially. 

At the AGM management discussed the outcome of Singapore Post’s strategic review and the recently announced strategic review into value creation options relating to the Australian logistics business. In our view, expansion in the Australian logistics market offers long-term growth and that historical issues surrounding structural weakness in postal volumes may be resolved by growth in replacement volumes from e-commerce. We continue to believe there is more than 60% upside in the share price.

• On the 22 July, waste-to-energy play Canvest Environmental Protection  (1381 HK) announced a pre-conditional Offer from Grandblue Environment (600323 CH) at $4.90/share (best & final), by way of a Scheme.
• Terms mirror that announced on the 7th July. Best Approach (54.75% of shares out) is seeking to roll over 7.23%. Pre-cons include the usual regulators: MoC, NDRC, SAMR and SAFE.
• Any new dividends paid will be netted. 4.478% blocking stake. Pre-IPO investor AEP Green Power, has 5.67%. Best Approach is required to abstain from voting on the Scheme and rollover.

• Dai Nippon Printing is a 150-year-old Japanese industrial conglomerate with a focus on niche growth businesses and a history of cross-shareholding sales and share repurchases
• The company has a dominant position in its highest earning segments and is undervalued at 5-6x forward P/E, potentially offering significant upside in the future
• Originally founded as Shueisha in 1876, DNP has evolved from a printing company to a diversified business with a strong emphasis on research and development.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Nokia OYJ (NOKIA FH) is currently the lowest ranked security in SX5E but still above the exit threshold. Its potential deletion can cause the addition of DSM-Firmenich (DSFIR NA). 
• Deutsche Post (DHL GR) & Reckitt Benckiser (RKT LN) are below the SX5P exit threshold. Their deletion can cause the addition of Intesa Sanpaolo (ISP IM) & Banco Bilbao (BBVA SM) .
• Cap Gemini SA (CAP FP) and Compass (CPG LN) are examples of companies with significant market caps which are excluded due to supersector coverage. 

• Doosan Robotics reported disappointing 2Q 2024 results. It generated sales of 14.4 billion won (up 10.1% YoY) and operating loss of 7.9 billion won in 2Q 2024.
• After the disappointing results in 2Q 2024, it is likely that the consensus will lower their sales and profit estimates of Doosan Robotics for the next three years.
• The consensus is likely to lower sales estimates by at least 15-20%+ in the next two years. In addition, the profit margin estimates are likely to be reduced materially. 

At the AGM management discussed the outcome of Singapore Post’s strategic review and the recently announced strategic review into value creation options relating to the Australian logistics business. In our view, expansion in the Australian logistics market offers long-term growth and that historical issues surrounding structural weakness in postal volumes may be resolved by growth in replacement volumes from e-commerce. We continue to believe there is more than 60% upside in the share price.

• On 24 July, the Financial Supervisory Service (FSS) ordered the Doosan Group to resubmit the merger plan. 
• It is rare for FSS to reject companies’ merger reports but there has been an exception this time since this deal is egregiously negative to many minority investors.
• Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the Doosan Group companies will be considered withdrawn. 

• The FSS requested Doosan Robotics to revise the prospectuses for both the Share Swap with Doosan Bobcat and Merger with Doosan Enerbility.
• Although the FSS’s wording seems aggressive, it does not request the cancellation. Authorities are displeased but lack political momentum to derail Doosan’s restructuring.
• The FSS asks Doosan to clarify merger synergies, warn of Robotics’ overvalued stock price and potential decline, and highlight the collaborative robot market’s growth risks.

• The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August.
• We see 8 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 11 stocks moving from SmallCap to MidCap and 3 new additions to MidCap.
• There are a few stocks that are expected to have passive flows from global and local index trackers over the next few months and that will add to the impact.

• After the market close on 24 July, Hanwha Corporation (000880 KS) announced that Hanwha Energy secured an additional 5.2% stake in Hanwha Corp through a tender offer.
• A total of 3.9 million shares have been applied for the tender offer as of 24 July (65% of targeted amount). 
• We believe that the Hanwha Group is likely to grab more shares in Hanwha Corp through an additional tender offer sometime in the next 6-12 months. 

• Timee Inc (215A JP) raised US$300m in its Japan IPO. The IPO had been a 100% secondary selldown by existing shareholders.
• Timee operates an on-demand staffing platform that connects part-time jobseekers with businesses in Japan.
• We have looked at the company’s past performance in our previous notes. In this note, we talk about the trading dynamics.

• Axon sells a public safety technology ecosystem that includes three main product groups, TASERs, body-worn cameras and other sensors, and evidence software, amongst a host of other software services, including virtual reality training.
• Axon’s solutions really seek to solve three of the biggest problems facing public safety, too many officers and too many suspects are dying from gunshots.
• Axon solves for this is as the monopoly provider of TASERs globally. A TASER can be used as an alternative to firearms to temporarily incapacitate a suspect so that they may be restrained with a much, much lower chance of doing physical harm.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• ESG Brew with ComfortDelGro’s Group Chief Sustainability and Risk Officer: ‘Our transition to cleaner energy vehicles will be a game-changer’ Land transport operator ComfortDelGro is switching its fleet of over 40,000 vehicles in 12 countries to cleaner energy ones as part of its sustainability drive.
• Jong explains: “We operate in 12 countries with a total fleet of over 40,000 vehicles spanning taxis, buses, trains and more.

• Proactiveanddiversifiedapproachtogrowth–SanyoTrading continues to execute its transformation strategy toward generating sustainable growth, underlined by its key principles in its latest long- term plan ‘SANYO VISION 2028’.
• While sales mix improvement remains a core theme to raise profitability, we believe the company is taking a multifaceted approach to generating growth through margin enhancement efforts, sales volume expansion, and earnings-accretive M&A.
• With this, management has access to different growth levers, as the business model is inevitably influenced by economic cycles.

• On 24 July, the Financial Supervisory Service (FSS) ordered the Doosan Group to resubmit the merger plan. 
• It is rare for FSS to reject companies’ merger reports but there has been an exception this time since this deal is egregiously negative to many minority investors.
• Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the Doosan Group companies will be considered withdrawn. 

• The FSS requested Doosan Robotics to revise the prospectuses for both the Share Swap with Doosan Bobcat and Merger with Doosan Enerbility.
• Although the FSS’s wording seems aggressive, it does not request the cancellation. Authorities are displeased but lack political momentum to derail Doosan’s restructuring.
• The FSS asks Doosan to clarify merger synergies, warn of Robotics’ overvalued stock price and potential decline, and highlight the collaborative robot market’s growth risks.

• The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August.
• We see 8 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 11 stocks moving from SmallCap to MidCap and 3 new additions to MidCap.
• There are a few stocks that are expected to have passive flows from global and local index trackers over the next few months and that will add to the impact.

• After the market close on 24 July, Hanwha Corporation (000880 KS) announced that Hanwha Energy secured an additional 5.2% stake in Hanwha Corp through a tender offer.
• A total of 3.9 million shares have been applied for the tender offer as of 24 July (65% of targeted amount). 
• We believe that the Hanwha Group is likely to grab more shares in Hanwha Corp through an additional tender offer sometime in the next 6-12 months. 

• Timee Inc (215A JP) raised US$300m in its Japan IPO. The IPO had been a 100% secondary selldown by existing shareholders.
• Timee operates an on-demand staffing platform that connects part-time jobseekers with businesses in Japan.
• We have looked at the company’s past performance in our previous notes. In this note, we talk about the trading dynamics.

• Axon sells a public safety technology ecosystem that includes three main product groups, TASERs, body-worn cameras and other sensors, and evidence software, amongst a host of other software services, including virtual reality training.
• Axon’s solutions really seek to solve three of the biggest problems facing public safety, too many officers and too many suspects are dying from gunshots.
• Axon solves for this is as the monopoly provider of TASERs globally. A TASER can be used as an alternative to firearms to temporarily incapacitate a suspect so that they may be restrained with a much, much lower chance of doing physical harm.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• ESG Brew with ComfortDelGro’s Group Chief Sustainability and Risk Officer: ‘Our transition to cleaner energy vehicles will be a game-changer’ Land transport operator ComfortDelGro is switching its fleet of over 40,000 vehicles in 12 countries to cleaner energy ones as part of its sustainability drive.
• Jong explains: “We operate in 12 countries with a total fleet of over 40,000 vehicles spanning taxis, buses, trains and more.

• Proactiveanddiversifiedapproachtogrowth–SanyoTrading continues to execute its transformation strategy toward generating sustainable growth, underlined by its key principles in its latest long- term plan ‘SANYO VISION 2028’.
• While sales mix improvement remains a core theme to raise profitability, we believe the company is taking a multifaceted approach to generating growth through margin enhancement efforts, sales volume expansion, and earnings-accretive M&A.
• With this, management has access to different growth levers, as the business model is inevitably influenced by economic cycles.

• Nidec reported Q1 OP of ¥60b, above the consensus of ¥53b. However this also included a gain from the consolidation of Nidec PSA
• The key earnings driver was small precision motors, which are benefiting from recovery in HDD market and new earnings from cooling systems from AI Servers
• We revise up our full year forecasts but do not believe the share price will react strongly to the “beat.” Maintain bullish view on valuations

• Blackbuck (1355652D IN) is looking to raise up to US$300m in its upcoming India IPO. The deal will be run by Axis Capital, Morgan Stanley, JM Financial, IIFL Securities.
• Blackbuck is India’s largest digital platform for truck operators, with 963,345 operators in India transacting on its Blackbuck platform in FY24, comprising 27.52% of India’s truck operators, as per Redseer.
• Through Blackbuck, its customers digitally manage payments for tolling and fueling, monitor drivers and fleets using telematics, find loads on its marketplace and get access to used vehicle financing. 

• Sai Gon Cargo Service (SCS VN) reported a solid set of Q2 2024 numbers, with revenue up 53.2% YoY and profits up 46.8% YoY. 
• Volumes were up 50% YoY, and the balance revenue growth was from recent tariff hikes ( Sai Gon Cargo Services (SCS VN) Update: Price Hikes, Strong Q1 2024 Operational Numbers )
• The stock trades at 13x FY24e PE and a 7.5% dividend yield with upside from the current earnings trajectory. Finding 80% EBITDA operators with >40% ROE is rare.

• Azul’s valuation looks optically below, but we publish a deep dive illustrating that cash outflow concerns are the key driver.
• Heavy levels of payment arrears built up through COVID are likely to take time to wash through the cash flow statement, which should be a watch point for Abra discussions
• Given Azul’s margins are top tier by global standards, and Abra airlines Avianca and GOL have moderate leverage, we struggle to see major synergies that would change Azul’s situation.

• Nidec reported Q1 OP of ¥60b, above the consensus of ¥53b. However this also included a gain from the consolidation of Nidec PSA
• The key earnings driver was small precision motors, which are benefiting from recovery in HDD market and new earnings from cooling systems from AI Servers
• We revise up our full year forecasts but do not believe the share price will react strongly to the “beat.” Maintain bullish view on valuations

• Blackbuck (1355652D IN) is looking to raise up to US$300m in its upcoming India IPO. The deal will be run by Axis Capital, Morgan Stanley, JM Financial, IIFL Securities.
• Blackbuck is India’s largest digital platform for truck operators, with 963,345 operators in India transacting on its Blackbuck platform in FY24, comprising 27.52% of India’s truck operators, as per Redseer.
• Through Blackbuck, its customers digitally manage payments for tolling and fueling, monitor drivers and fleets using telematics, find loads on its marketplace and get access to used vehicle financing. 

• Sai Gon Cargo Service (SCS VN) reported a solid set of Q2 2024 numbers, with revenue up 53.2% YoY and profits up 46.8% YoY. 
• Volumes were up 50% YoY, and the balance revenue growth was from recent tariff hikes ( Sai Gon Cargo Services (SCS VN) Update: Price Hikes, Strong Q1 2024 Operational Numbers )
• The stock trades at 13x FY24e PE and a 7.5% dividend yield with upside from the current earnings trajectory. Finding 80% EBITDA operators with >40% ROE is rare.

• Azul’s valuation looks optically below, but we publish a deep dive illustrating that cash outflow concerns are the key driver.
• Heavy levels of payment arrears built up through COVID are likely to take time to wash through the cash flow statement, which should be a watch point for Abra discussions
• Given Azul’s margins are top tier by global standards, and Abra airlines Avianca and GOL have moderate leverage, we struggle to see major synergies that would change Azul’s situation.

• Nippon Yusen Kk (9101 JP) today announced an upward revision of H1 and full-year guidance. It was a dramatic increase.
• The breakdown of the OP and RP numbers suggests a huge gain in containers in Q1 and into Q2. The breakdown of revenue and OP changes suggested substantial H2 conservatism.
• On a capital-adjusted basis, Nippon Yusen is now slightly cheap vs its domestic peers and has shown a willingness to spend its excess cash on buybacks. Expect more.

• Canvest Environmental Protection Group (1381 HK) disclosed a pre-conditional Cayman scheme privatisation from Grandblue Environment Co A (600323 CH) at HK$4.90 per share, an 11.6% premium to the last close price.
• The precondition relates to the completion of capital injection into the offeror, Grandblue shareholder, and regulatory approvals. The heavy presence of SOE entities makes this a formality.
• While not a knockout bid, the offer (which is final) is reasonable. Shareholders with blocking stakes will be supportive. Timing is the key risk as the offer is long-dated.

• During Kim Byung-hwan’s hearing, he acknowledged market concerns about the Doosan merger, increasing skepticism about Doosan’s ability to maintain the original merger ratio.
• Calculating Bobcat’s net asset value using the net asset value method yields approximately ₩6.1T, derived from ₩5.95T in year-end equity plus ₩0.13T in adjustments.
• Reassess arb trading opportunities; with no short hedge for Robotics, consider an outright long position in Bobcat if its swap price is revised and the spread widens.

• Ryanair issued a stark warning on summer pricing today with 1Q25 results and we cut our FY25 net income 31% accordingly.
• Our forecasts represent a re-set of unitary economics to pre-pandemic levels and it is difficult to plot improvement unless consolidation benefits or winter surgery help FY26.
• Ryanair’s cost advantage has widened markedly against peers, justifying a strategy of continued market share focus as competitors face greater challenges.

• According to The Sunday Times, Philip Jansen is reportedly planning a takeover bid for Rentokil Initial (RTO LN), a FTSE 100 pest control company, with private equity backing.
• Jansen plans to boost Rentokil’s US performance and enhance its integration with Terminix, with the potential to market consolidation. Closest comparable Rollins trades at 33.7x EV/NTM EBIT vs. Rentokil’s 15.7x.
• As a global leader in pest control and hygiene services, Rentokil boasts a strong market position and brand recognition. Rentokil will report its H1 results on 25 July. Long.

• We are initiating coverage of Symbotic (SYM) with a Sell Rating and $10 target. 
• The latest quarterly report from SYM suggests there could be little in the form of catalysts with the biggest news being related to a business owned by the CEO
• We believe investors are putting too much reliance on SYM generating revenue from Wal-Mart (WMT) even though WMT is also using SYM’s competition for warehouse automation. 

• We remain optimistic about CXW’s new business activities, operating improvements and cost containment efforts.
• Over time, we expect occupancies at CXW facilities to continue to increase, the pending ICE termination of services at CXW’s South Texas Family Residential Center notwithstanding, as ICE & multiple government entities seek capacity.
• CXW also continues to strengthen its balance sheet, with a 2Q24 debt offering concurrent with a tender offer for 2026 8.25% notes.

• Nippon Yusen Kk (9101 JP) today announced an upward revision of H1 and full-year guidance. It was a dramatic increase.
• The breakdown of the OP and RP numbers suggests a huge gain in containers in Q1 and into Q2. The breakdown of revenue and OP changes suggested substantial H2 conservatism.
• On a capital-adjusted basis, Nippon Yusen is now slightly cheap vs its domestic peers and has shown a willingness to spend its excess cash on buybacks. Expect more.

• Canvest Environmental Protection Group (1381 HK) disclosed a pre-conditional Cayman scheme privatisation from Grandblue Environment Co A (600323 CH) at HK$4.90 per share, an 11.6% premium to the last close price.
• The precondition relates to the completion of capital injection into the offeror, Grandblue shareholder, and regulatory approvals. The heavy presence of SOE entities makes this a formality.
• While not a knockout bid, the offer (which is final) is reasonable. Shareholders with blocking stakes will be supportive. Timing is the key risk as the offer is long-dated.

• During Kim Byung-hwan’s hearing, he acknowledged market concerns about the Doosan merger, increasing skepticism about Doosan’s ability to maintain the original merger ratio.
• Calculating Bobcat’s net asset value using the net asset value method yields approximately ₩6.1T, derived from ₩5.95T in year-end equity plus ₩0.13T in adjustments.
• Reassess arb trading opportunities; with no short hedge for Robotics, consider an outright long position in Bobcat if its swap price is revised and the spread widens.

• Ryanair issued a stark warning on summer pricing today with 1Q25 results and we cut our FY25 net income 31% accordingly.
• Our forecasts represent a re-set of unitary economics to pre-pandemic levels and it is difficult to plot improvement unless consolidation benefits or winter surgery help FY26.
• Ryanair’s cost advantage has widened markedly against peers, justifying a strategy of continued market share focus as competitors face greater challenges.

• According to The Sunday Times, Philip Jansen is reportedly planning a takeover bid for Rentokil Initial (RTO LN), a FTSE 100 pest control company, with private equity backing.
• Jansen plans to boost Rentokil’s US performance and enhance its integration with Terminix, with the potential to market consolidation. Closest comparable Rollins trades at 33.7x EV/NTM EBIT vs. Rentokil’s 15.7x.
• As a global leader in pest control and hygiene services, Rentokil boasts a strong market position and brand recognition. Rentokil will report its H1 results on 25 July. Long.

• We are initiating coverage of Symbotic (SYM) with a Sell Rating and $10 target. 
• The latest quarterly report from SYM suggests there could be little in the form of catalysts with the biggest news being related to a business owned by the CEO
• We believe investors are putting too much reliance on SYM generating revenue from Wal-Mart (WMT) even though WMT is also using SYM’s competition for warehouse automation. 

• We remain optimistic about CXW’s new business activities, operating improvements and cost containment efforts.
• Over time, we expect occupancies at CXW facilities to continue to increase, the pending ICE termination of services at CXW’s South Texas Family Residential Center notwithstanding, as ICE & multiple government entities seek capacity.
• CXW also continues to strengthen its balance sheet, with a 2Q24 debt offering concurrent with a tender offer for 2026 8.25% notes.